On Wednesday, Boeing announced its plans to raise production for its 787 Dreamliner in 2019 from 12 aircraft per month to 14 aircraft per month. Although the long-haul aircraft market has slowed recently, this announcement signals Boeing’s confidence that the jetliner will continue its strong sales.
BAE Systems, Bombardier, and Huntington Ingalls all reported 2Q17 earnings this past week with strong results. BAE reported earnings higher than consensus expectations with earnings per share (“EPS”) and revenue up ~17% and ~10% year-over-year (“YoY”), respectively.
Boeing, General Dynamics, Northrop Grumman, and Raytheon all reported 2Q17 earnings this past week with mixed results. Boeing was among the biggest winners, with shares rising 8% to a record high, as the company announced significantly higher cash flow and profits stemming from meaningful cost cutting.
President Trump announced this week he will nominate Mark Esper, former Raytheon lobbyist, and West Point graduate, as Secretary of the Army. Esper’s nomination adds to the strong presence of former high-ranking defense contractors already in the Pentagon.
Earlier this week, the Terminal High Altitude Area Defense (“THAAD”) system, which was previously designed for short-range defense, had its first test against an intermediate-range ballistic missile (“IRBM”), a weaponry system mirroring North Korea’s. The results of the test were promising as the system seamlessly defended against the incoming threat.
Congress is currently discussing the 2018 military budget, which is centered around two main ideas: the human capital component and equipment element. The human capital portion is comprised of increasing military pay and growing the number of active troops.
The Senate Armed Services Committee unveiled a $700 billion defense authorization bill that will set the stage for a showdown with House budget planners and the White House over national defense spending priorities.
Both Boeing and Airbus outperformed analyst order expectations at the Paris Airshow this past week. At the end of the week-long show, Boeing and Airbus booked $75 billion and $42 billion in orders, respectively.